Landlord Council Tax Guide: Who Is Responsible?

Usually, landlords don’t have to worry about council tax. However, when it comes to HMO properties and vacant periods, things can start to get confusing.

It’s important to understand your landlord council tax responsibilities so as not to get caught out by any unexpected bills or legal issues. So, who pays council tax? What happens when your property is empty? And what about unpaid tenant debts?

From who is responsible to available discounts and exemptions, our council tax guide covers everything responsible landlords need to know.

Should I Be Paying Council Tax?

All residential properties in England and Wales are liable for council tax. If you fail to pay on time, there could be serious financial and legal consequences.

How does it work? The council tax system works according to a hierarchy of liability. The first on the list to pay is any adult over the age of 18 who is an occupant of the property. The landlord or property owner comes much further down this list.

How Is Council Tax Calculated?

Properties are assessed by the Valuation Office Agency (VOA) and placed within bands A-H according to the location and type of housing. The banding is based on the amount the property could be sold for and the cost for each band varies by council.

Who Pays Council Tax: Tenant Or Landlord?

This depends on the sort of tenancy agreement you have in place. Usually, if you rent the entire property to one or several joint tenants, it is their responsibility to pay. (This includes single occupants, families and shared tenancies) In this case, the bills will be sent directly from the local council to your tenants, leaving you out of the equation.

However, if you rent to several tenants with individual tenancy agreements, you will become responsible for paying council tax. Therefore, if you rent out an HMO property, you will be liable to pay.

Do Landlords Pay Council Tax On Empty Properties?

Yes. During void periods, the landlord is responsible for paying council tax.

The size of the bill depends on your local council. You could be given a discount of up to 50% while the property remains unoccupied. However, this is becoming more unlikely as the number of unoccupied properties grow.

If your property is unfurnished, you may be exempt from council tax for up to 6 months.

Is A Landlord Liable For Unpaid Council Tax?

Not usually. As long as the tenancy agreement stipulated that council tax payments were the responsibility of the tenants, then landlords should be safe if tenants leave with unpaid debts.

If your property is vacant for any time, as the landlord, you will be responsible for paying tax during this period. However, you should not be responsible for repaying leftover bills that should have been paid by tenants while they were living in the property.

Without proof of a signed tenancy agreement, it will be harder to convince the council of your exemption if your tenant moves out early without notifying you.

See our blog on who is responsible for unpaid utility bills for more answers to common questions regarding bills.

Landlord Council Tax Exemption

Some properties and tenants are either exempt from paying council tax or are eligible for a discounted rate.

If you’re a landlord of an HMO property, make sure you check your tenant’s status to find out if you are eligible for any discounts. For example, if there is a mix of full-time students and one adult, you may receive a 25% discount.

Who Is Exempt From Council Tax?

There are certain groups of people who are exempt or eligible for a discounted council tax bill;

• Single occupants of a property receive a 25% discount
• Full time students are exempt
• Live in carers are exempt
• Tenants below the age of 18 are exempt

What Properties Are Exempt From Council Tax?

There are also a number of properties that are exempt from paying council tax;

• Unfurnished properties may be exempt for six months
• Recently repaired properties may be exempt for six months
• Properties occupied by full time students only
• Properties solely inhabited by tenants under the age of 18 receive a 50% discount

Landlord Council Tax Advice

To ensure you stay on top of your council tax responsibilities and avoid any unexpected bills, follow these simple tips;

• Always determine who is responsible for paying council tax in the tenancy agreement
• Keep a signed copy of this agreement on file
• Notify your local authority at each change of tenancy and give the names of new tenants
• For HMO properties where you are liable to pay council tax, ensure you factor this cost into the rent price
• Plan for any void periods in which you may have to pay council tax
• Check for any council tax discounts or exemptions you may be eligible for
• Try to minimise void periods to avoid paying council tax in between tenants

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